Ty v.

First National Surety and Assurance Company

G.R. No. L-16138            
April 29, 1961

Facts:

At different times within a period of two months prior to December 24, 1953, the
plaintiff herein Diosdado C. Ty, employed as operator mechanic foreman in the
Broadway Cotton Factory, in Grace Park, Caloocan, Rizal, at a monthly salary of
P185.00, insured himself in 18 local insurance companies, among which being the eight
above named defendants, which issued to him personal accident policies, upon payment
of the premium of P8.12 for each policy. Plaintiff's beneficiary was his employer,
Broadway Cotton Factory, which paid the insurance premiums.

On December 24, 1953, a fire broke out which totally destroyed the Broadway Cotton
Factory. Fighting his way out of the factory, plaintiff was injured on the left hand by a
heavy object. He was brought to the Manila Central University hospital, and after
receiving first aid there, he went to the National Orthopedic Hospital for treatment of
his injuries

If the Insured sustains any Bodily Injury which is effected solely through violent,
external, visible and accidental means, and which shall not prove fatal but shall result,
independently of all other causes and within sixty (60) days from the occurrence
thereof, in Total or Partial Disability of the Insured, the Company shall pay, subject to
the exceptions as provided for hereinafter, the amount set opposite such injury:

... The loss of a hand shall mean the loss by amputation through the bones of the wrist....

Defendants rejected plaintiff's claim for indemnity for the reason that there being no
severance of amputation of the left hand, the disability suffered by him was not covered
by his policy. Hence, plaintiff sued the defendants in the Municipal Court of this City,
and from the decision of said Court dismissing his complaints, plaintiff appealed to this
Court.

Issue:
Whether or not the plaintiff’s claim for indemnity must be granted.

Ruling:

No.  Authorities are cited to the effect that "total disability" in relation to one's
occupation means that the condition of the insurance is such that common prudence
requires him to desist from transacting his business or renders him incapable of
working. (46 C.J.S., 970). It is also argued that obscure words or stipulations should be
interpreted against the person who caused the obscurity, and the ones which caused the
obscurity in the cases at bar are the defendant insurance companies.

While we sympathize with the plaintiff or his employer, for whose benefit the policies
were issued, we can not go beyond the clear and express conditions of the insurance
policies, all of which define partial disability as loss of either hand
by amputation through the bones of the wrist." There was no such amputation in the
case at bar. All that was found by the trial court, which is not disputed on appeal, was
that the physical injuries "caused temporary total disability of plaintiff's left hand." Note
that the disability of plaintiff's hand was merely temporary, having been caused by
fracture of the index, the middle and the fourth fingers of the left hand.

We might add that the agreement contained in the insurance policies is the law between
the parties. As the terms of the policies are clear, express and specific that only
amputation of the left hand should be considered as a loss thereof, an interpretation that
would include the mere fracture or other temporary disability not covered by the
policies would certainly be unwarranted.
PHILIPPINE AMERICAN LIFE AND GENERAL INSURANCE COMPANY
v. JUDGE LORE R. VALENCIA-BAGALACSA
G.R. No. 139776             
August 1, 2002

Facts:

On June 20, 1995, private respondents, as legitimate children and forced heirs of their
late father, Faustino Lumaniog, filed with the aforesaid RTC, a complaint for recovery of
sum of money against petitioner alleging that: their father was insured by petitioner
under Life Insurance Policy No. 1305486 with a face value of P50,000.00; their father
died of "coronary thrombosis" on November 25, 1980; on June 22, 1981, they claimed
and continuously claimed for all the proceeds and interests under the life insurance
policy in the amount of P641,000.00, despite repeated demands for payment and/or
settlement of the claim due from petitioner, the last of which is on December 1, 1994,
petitioner finally refused or disallowed said claim on February 14, 1995; and so, they
filed their complaint on June 20, 1995.

Petitioner filed an Answer with Counterclaim and Motion to Dismiss, contending that:
the cause of action of private respondents had prescribed and they are guilty of laches; it
had denied private respondents’ claim in a letter dated March 12, 1982, signed by its
then Assistant Vice President, Amado Dimalanta, on ground of concealment on the part
of the deceased insured Faustino when he asserted in his application for insurance
coverage that he had not been treated for indication of "chest pain, palpitation, high
blood pressure, rheumatic fever, heart murmur, heart attack or other disorder of the
heart or blood vessel" when in fact he was a known hypertensive since 1974; private
respondents sent a letter dated May 25, 1983 requesting for reconsideration of the
denial; in a letter dated July 11, 1983, it reiterated its decision to deny the claim for
payment of the proceeds; more than ten (10) years later, or on December 1, 1994, it
received a letter from Jose C. Claro, a provincial board member of the province of
Camarines Sur, reiterating the early request for reconsideration which it denied in a
letter dated February 14, 1995.

Issue:

Whether or not the complaint filed by private respondents for payment of life insurance
proceeds is already barred by prescription of action.

Ruling:
It must be emphasized that petitioner had specifically alleged in the Answer that it had
denied private respondents’ claim per its letter dated July 11, 1983. Hence, due process
demands that it be given the opportunity to prove that private respondents had received
said letter, dated July 11, 1983. Said letter is crucial to petitioner’s defense that the filing
of the complaint for recovery of sum of money in June, 1995 is beyond the 10-year
prescriptive period.

It is for the above reason that the RTC committed a grave abuse of discretion when, in
resolving the motion for reconsideration of petitioner, it arbitrarily ruled in its Order
dated December 12, 1997, that the period of ten (10) years had not yet lapsed. It based
its finding on a mere explanation of the private respondents’ counsel and not on
evidence presented by the parties as to the date when to reckon the prescriptive period.